Will I ever get a mortgage?

mrskingandthescarecrow

I became debt free in 2016. I had quite a lot of debt and defaulted on some accounts back in 2008. All the defaulted debt has all been paid and has dropped off my credit report, including a ccj that has been paid in full and dropped off my report in January. There's nothing but green ticks on there now as I haven't missed a payment in the last six years.

I'd now like to save for a house deposit and buy my own place but not sure if I can get a mortgage with my circumstances and past credit history. My circumstances are that I am a single mother to four children under 12. I work part time around school and earn £11,150 a year. I get tax credits and Child support but not sure if these would be taken into account. Looking at the online calculators using my salary only it either says I can't get a mortgage or its amount of around 40k, which wont really buy much.

Am I wasting my time saving up?

Thrugelmir

If it's a dream you aspire to. Then go for it. No harm in saving even if it's some years away. A Help to Buy ISA would give you a boost.

drsquirrel

I've seen a few providers mortgage calculators who let you enter tax credits, child benefit and such so give them a try. Nationwide's affordability calculator is one.

Its worth saving either way, you never know how things may change in the future.

Baring in mind it takes minimum 4.5 years to get a full HTB ISA bonus its worth starting now.

Westminster

The main thing will be to keep your credit files clear so make sure you stay up to date and at least have direct debits in place to make minimum payments

csgohan4

Keep saving and keep progressing in your job to get a higher income multiplier.Generally you can only lend x4.5 your income not including debts/commitments

Verix

You may struggle to afford anything suitable right now although there are lenders who can take tax credits and other benefits in to account. Half an hour with a broker to work out affordability shouldn't cost you a penny and would give you an idea of what you could work towards if you'd like to get a more concrete idea.

Certainly saving up now can't be a bad thing though whether you end up buying a house or not.

erin110

There are lenders that will consider your income along with tax credits and child benefit which should bump up your borrowing amount. If you receive any court ordered child maintenance, this can also be used. Ensuring you have no debt will also help, as payments to service the debt will be deducted from your overall income.
If the borrowing amount is still too low. It may be worth considering shared ownership/equity however, speak to a broker first so they can really asses your situation.
I just hope you do not live in the south.

Fuzion

No harm in saving, life has lots of unexpected twists and turns. Even if your income doesn't rise dramatically, one day you might be in a position to put in a joint application, and in any case whatever you save will be there for you or your children if needed.

mrskingandthescarecrow

Thank you for the advice. I will aim to save more than a 10% deposit and have a lower mortgage. Luckily I don't live in the South of England.

leanne12345

Just to add, we got a mortgage earlier this year through Natwest who took into account our tax credits and child benefit. I would recommend using a broker when you have saved enough for a deposit. Good luck!

mrskingandthescarecrow

Just wanted to update - I read somewhere on the site that Nationwide will take tax credits into account. I decided to apply for an agreement in principle with them to test the water. (I bank and save with them too so thought I'd stand best chance with them).


They have approved me in principle for 70k. I had to tell them about the CCJ too even though it is over six years ago. I'm not sure if they would have allowed more but this is a figure I'm comfortable with and will save any shortfall myself. So I could move as soon as the summer!